Deutschland gibt die Hoffnung auf ein Wachstum im Jahr 2024 auf

>Germany’s government is poised to cut its prediction for Europe’s biggest economy and now expects no expansion at all this year, according to people familiar with the matter.

>Officials in Berlin are set to lower their forecast for growth in 2024 to — at best — stagnation, down from 0.3% previously projected, said the people, who declined to be identified because the predictions remain confidential for now.

>Such an outcome would mean yet another lost year for an economy that has been weighed down by the weakness of its industrial sector amid Russia’s shutdown in gas supply after the invasion of Ukraine, as well as feeble Chinese demand and its struggle to pivot to electric vehicle production.

>A string of bad news — from Volkswagen AG’s threat to close factories in Germany to Intel Corp’s decision to postpone a €30 billion ($33.5 billion) investment decision for a new chip plant in the country’s east — underlines the additional headwinds bearing down on the economy.

>Add in the risk of Donald Trump returning to the White House and Germany is heading toward a perfect storm which could depress GDP even further, one of the people said.

>“The fact is that things are looking pretty dicey for Germany,” Bloomberg Economics’s Jamie Rush told Bloomberg TV on Monday. “We are going to see persistent weakness in the German economy and as time has worn on it is looking more structural than cyclical. Germany has long-term problems that need to be dealt with in terms of its competiveness.”

>German bonds held losses after the report. The two-year yield traded three basis points higher on the day at 2.1%, near the lowest level since 2022. The notes have rallied sharply over the past week as the market prepares for the European Central Bank to cut interest rates again in October.

>A spokeswoman for the Economy Ministry declined to comment, saying that Economy Minister Robert Habeck would present the government’s updated forecast soon in Berlin.

>The prospect of no growth is an effective admission of failure by the coalition government and another blow to the record of Chancellor Olaf Scholz, who hasn’t seen the economy expand for two consecutive quarters since taking office in December 2021.

>With an election now less than a year away, it also narrows the window perilously for him to achieve any meaningful pickup before going to voters, whose discontent has already made itself known this year in ballots for the European Parliament and in eastern states.

>Traders now see a roughly 80% chance of a quarter-point reduction next month, swiftly following a similar move in September, as signs keep mounting that the euro-area economy is slowing.

>The government’s final estimate for 2024 might come in even weaker than zero growth for Germany depending on industrial orders and output data due shortly before the release of its updated forecast for gross domestic product on Oct. 9, the people said.

>Economy ministry officials are currently working on the new projection, which could still change before its final release. A stagnation, if that can be achieved, would still exceed the projection for a 0.1% contraction from the nation’s leading economic institutes in the past week.

>Weaker growth prospects would dent tax revenues which could further complicate efforts in Scholz’s ruling coalition to close a budget gap in the 2025 finance plan. However, it would also allow more net new borrowing — roughly an additional €2 billion — under a rule that allows the government to take on more debt in difficult economic times, the people said.

Does it need to grow? Isn’t it one of the most developed countries on earth and population is getting old?

The problem is that Germany is the main trade partner for many EU countries, which indirectly hinders them as well. Unless new (in addition to the already present) trade opportunities develop among other member states to fill the void left by Germany, the situation will remain challenging. Additionally, the ECB is keeping inflation in check by cooling down the economy; maybe it’s time to lower interest rates again

[this chart](https://ourworldindata.org/grapher/electricity-generation?tab=chart&country=~DEU) looks beyond sad

germany produces less electricity than 40 years ago

and it’s especially sad when you [compare to china](https://ourworldindata.org/grapher/electricity-generation?tab=chart&country=DEU~CHN)

If only Germany had the fiscal capacity to, for example, spend on updating its aging infrastructure and therefore stimulate the economy. Like the US did and successfully avoided a recession.

It didn’t even have to be infrastructure, they could have invested in something else strategically important for the future like attracting state of the art chip manufacturing, etc. And it would have benefited them and the EU.

But I guess the outdated budget rules are more important 🙄

USA is growing.

But then they are not subject to massive expansion of bureaucracy EU style.

No growth, yet they are raising taxes next year

insane to be alive and witness how other EU members get mad cash to help if they have problems (like the EU covid recovery and resilience funds, or NGEU of which we are once again financing the largest share but not receiving an equal amount) and now our EU brothers and sisters act like they don’t know the solution:

EU solidarity. bailout. Stop the draconic EU net contributions if a country is in a recession. temporarily suspend the excessive debt procedure punishment Damocles sword for Germany.